Walnut crop forecast is strong

If the official federal forecast of 485,000 tons proves true, it would be second only to 2010's production of 503,000 tons, and 2011 could well set a new record for dollar value, with walnut prices running well ahead of last year.

That's of keen interest to walnut buyers worldwide, as California accounts for nearly 80 percent of global supply and nearly the entire U.S. crop.

San Joaquin County leads the state in walnut production. The county's 2010 crop alone was valued at more than $207 million.

R.L. "Pete" Turner, whose Turner Associates consulting firm is in Stockton and who is chairman of the California Independent Handlers Coalition, said demand today is "super strong" with virtually no walnuts currently available and the fall harvest just slowly getting started.

The handlers group earlier this month set opening season benchmark prices for in-shell walnuts at 40 cents a pound higher than last year's opening price, and shelled meats were up 90 cents a pound higher.

Late last week, he reported traders contracting for in-shell walnuts at prices 5 to 10 cents a pound above those opening prices and estimated 20 percent of the crop was already committed.

"I've never seen anything like it," he said.

He worried, however, that the market could suddenly turn. There was a similarly strong start to the walnut market in 2008, but that fall's world financial crisis triggered a collapse in commodity demand.

"What scares me, though, is there's a lot of risk in that market out there," Turner said. "Is China going to continue to buy? ... They are supposed to have a big (domestic Chinese) crop. ... Are the Spaniards and Europeans going to be willing to pay these prices?"

Uncertainty in European financial markets is another reason for concern, as are the ups and downs of currency markets.

Walnut exporters also face a compressed season. Because of California's cool, wet spring and mild summer, the harvest could be up to two weeks later than usual.

That squeezes the usual six-week window to ship nuts to Europe to meet holiday season demand down to four weeks.

"You've got to slam as much production into those four weeks; otherwise, as they say, you've missed the boat," Turner said.

And, of course, until the nuts are harvested, there's always the possibility of heat, insects, early fall rains or other problems causing crop damage or losses.

"We're certainly heading for a record-busting year as far as prices, but again, there's some risk out there we still have to get through," he said.

San Joaquin County farmers reported a good-quality crop in their orchards late last week.

Bob Brocchini, who cultivates a mix of orchard crops in Ripon, said the federal forecast reflects what he sees in his walnut trees - a high-quality crop slightly smaller than last year.

"All in all, it looks like a good crop," he said.

And he welcomed the strong demand.

"I think we're going to continue to do well in the walnuts for the foreseeable future," Brocchini said.

He expects to begin his walnut harvest this week and continue to late October.

William "Chip" Salmon, general manager of Augusta Bixler Farms in the south San Joaquin Delta, oversees nearly 400 acres of walnut trees.

"It'll be overall a pretty good-size crop," he predicted last week.

Salmon, however, said he had seen some pest problems - codling moth and husk fly in particular - and worried that recent days of 100-degree weather could cause some nuts to burn or darken.

What the walnut crop is really like is hidden by all those shells, Salmon said.

"We really won't know until we shake the trees and see what goes into the dryer and what comes out of the crackers," he said.

Still, Salmon anticipated good prices and continued strong demand for walnuts, noting that many growers and others are investing in and installing new walnut processing, drying and shelling equipment.

"You know it's got to be better when you see so many independent crackers going in," he said.